Hong Kong, China stocks muted as trade tensions dim appetite, Beijing measures offer support

Hang Seng Index little changed and Shanghai falls, though banks and property stocks are among the bright spots

PUBLISHED : Friday, 27 July, 2018, 7:07pm
UPDATED : Friday, 27 July, 2018, 7:07pm

Hong Kong stocks ended little changed on Friday and mainland Chinese shares fell, amid continuing concern over trade tensions between the US and China, although measures announced this week by Beijing to stimulate the economy offered support.

The Hang Seng Index ended up 0.08 per cent, or 23.14 points, at 28,804.28, recovering from Thursday’s slip into negative territory, while the Hang Seng China Enterprises Index gained 0.24 per cent, or 26.07 points, to 11,047.42. In mainland China, the Shanghai Composite finished down 0.3 per cent, or 8.64 points, at 2,873.59.

While the course of the trade tensions is not clear, “sentiment has improved a bit as the Chinese government is introducing measures to stimulate the economy by increasing infrastructure spending,” said Kenny Tang Sing-hing, chief executive of Jun Yang Securities. “The Hang Seng is likely to have a tight trading range.”

Financial shares stood out as the main gainers on Friday, with investors taking heart from a looser than expected series of new regulations on China’s wealth management industry announced earlier in the week, although the gains could be short-lived.

“The asset management measures introduced by the mainland government are not as tight as the market has experienced before, but the government still needs to deleverage and tighten the control of the financial sector, so I don’t think their share prices will go up too much,” said Tang.

Bank of China Hong Kong rose 0.27 per cent to HK$37.90, and HSBC Holdings gained 0.13 per cent to HK$74.85. Hang Seng Bank shares finished up 1.25 per cent to HK$210.20, after breaking a year high of HK$210.60 earlier in the day.

The share price rise meant it became the second-biggest listed bank after HSBC, as its market capitalisation reached HK$401.87 billion, exceeding the Bank of China’s HK$400.7 billion. HSBC’s market cap is HK$1.5 trillion. HSBC is Hang Seng Bank’s majority shareholder.

Among other banks, China Construction Bank fell 0.6 per cent to HK$7.10 and ICBC was unchanged at HK$5.82.

Insurer Manulife advanced 0.56 per cent to HK$144.60, and AIA gained 0.5 per cent to HK$68.65, but Ping An fell 0.4 per cent to HK$73.70.

Elsewhere, internet giant Tencent Holding was the most traded stock, with turnover of HK$5.4 billion. It ended down 0.5 per cent at HK$373, with investors concerned that it could see a decline users in the way that Facebook had.

Geely Automobiles dropped 3.3 per cent to HK$18.42, having hit a low for the month of HK$18.12 earlier in the day, as investors worried about a slowdown in the car industry in China.

Other mainland Chinese indices followed Shanghai lower, with the CSI 300 – which tracks large companies listed in Shanghai and Shenzhen – dropping 0.43 per cent, or 15.24 points, to 3,521.23, the Shenzhen Composite Index falling 0.66 per cent, or 10.65 points, to 1,599.08 and the ChiNext shedding 0.72 per cent, or 11.55 points, to 1,594.57.

Some mainland property stocks did well as investors hunted for bargains after their recent declines, according to Tang of Jun Yang Securities.

Longfor Group was up 1.5 per cent to HK$23.90, Shimao Property rose 1.53 per cent to HK$23.20 and Evergrande gained 1.4 per cent to HK$21.95.